Federal Overtime Rule Delayed

On November 22, a federal judge in Texas halted — at least temporarily — the Department of Labor’s new federal overtime rule that was scheduled to go into effect December 1, 2016.

The new overtime rule changes the salary requirements for classifying jobs as being exempt from overtime pay. 

Under current regulations, the minimum salary requirement for these exemptions generally is $455 per week, which annualizes to $23,660 per year. Under the revised regulations (those set for implementation December 1, 2016), the minimum salary would more than double to $913 per week, which annualizes to $47,476 per year.

The judge’s injunction halts the revised regulations from becoming effective on December 1; however,  it is a preliminary injunction, not a permanent one.  No doubt considerable speculation will point to various scenarios from this point forward.

When the full case is heard, the court could allow the rule to go forward. The incoming Trump Administration now has time to review, and decide its preferred course of action, if any.

At this time, employers do not need to implement changes by the December 1, 2016 deadline. However, many employers affected by the proposed rule have already communicated and implemented changes at their workplaces. In this situation, a review with legal counsel along with in-depth discussion of employee relations impacts, are definitely called for.